High Courts Divided Over Condonation of Delay in Filing Appeals Under Section 107 of GST Act

The Goods and Services Tax (GST) regime has introduced a new set of rules and procedures for filing appeals against tax orders. One area that has sparked debate is the time limit for submitting these appeals to the Appellate Authority.

As per Section 107 of the Central GST Act, 2017 and State GST Acts, taxpayers have a window of four months from the date of communication of the order to file their appeal. However, this strict timeline has faced challenges from taxpayers seeking condonation or extension of the delay on grounds of sufficient cause.

Two contrasting viewpoints have emerged from various High Courts on this issue.

One perspective, supported by judgments like Singh Enterprises v. Commissioner of Central Excise and Commissioner of Customs and Central Excise v. Hongo India Private Limited, maintains that the Appellate Authority lacks the power to condone delays beyond the statutorily prescribed period. The rationale is that the GST Acts are self-contained codes that exclude the applicability of the general Limitation Act, 1963.

However, a recent judgment by the Calcutta High Court in S.K. Chakraborty & Sons v. Union of India has taken a different stance. The court held that Section 107 of the GST Acts does not expressly or impliedly exclude the application of Section 5 of the Limitation Act, 1963, which allows for condonation of delays upon sufficient cause being shown. Consequently, the Appellate Authority retains the discretion to admit appeals filed beyond the four-month period, subject to the taxpayer providing a satisfactory explanation for the delay.

Uncertainty Creation:

This divergence in judicial interpretations has created uncertainty for taxpayers navigating the appeal process under the GST regime. While some High Courts have dismissed petitions challenging the Appellate Authority’s rejection of delayed appeals, others have upheld the authority’s power to condone delays based on the principles of the Limitation Act, 1963.

As the legal landscape continues to evolve, taxpayers and authorities alike await further clarity and a harmonized stance from the higher judiciary on this crucial issue of time-barred appeals under the GST framework.

Key Takeaways:

1. The Appellate Authority is currently dismissing appeals filed by taxpayers under GST on the grounds of being time-barred, exceeding the four-month period prescribed by Section 107 of the CGST Act, 2017/SGST Act, 2017.

2. Challenges to the Appellate Authority’s orders before the High Courts have led to divergent judicial opinions, impacting the disposition of time-barred appeals.

3. The application of the Limitation Act, 1963 to Section 107 of the CGST Act, 2017/SGST Act, 2017 has been a point of contention in these cases, with different courts interpreting its applicability differently.

4. Relevant judgments, including those of the Hon’ble Supreme Court and various High Courts, have influenced the treatment of time-barred appeals under GST, leading to varied outcomes in different jurisdictions.

FAQ

Q1: What is the current stance on time-barred appeals under GST?

A1: The current stance involves the dismissal of appeals exceeding the four-month limit prescribed by Section 107 of the CGST Act, 2017/SGST Act, 2017 by the Appellate Authority.

Q2: How have High Courts responded to challenges against the Appellate Authority’s orders?

A2: High Courts have presented divergent judicial opinions, leading to varied outcomes in the disposition of time-barred appeals under GST.

Q3: What is the role of the Limitation Act, 1963 in these cases?

A3: The application of the Limitation Act, 1963 to Section 107 of the CGST Act, 2017/SGST Act, 2017 has been a point of contention, with different courts interpreting its applicability differently.

Q4: How have relevant judgments influenced the treatment of time-barred appeals under GST?

A4: Judgments from the Hon’ble Supreme Court and various High Courts have impacted the disposition of time-barred appeals, leading to varied outcomes in different jurisdictions.